Friday, April 26, 2013

Serious Games Change Banking Industry Attitudes Towards Risk And Lending

SimuStar: Credit Theory Meets Serious Games


Serious Game assesses business risk and loan structuring

Via: Caspian Learning and Omega Performance

Omega Performance partnered with Caspian Learning to develop and bring to the market SimuStar -- an advanced credit simulation aiming at changing banking industry attitudes towards risk, lending and return (Please find also  Serious Games Improving Training and Performance Metrics)

SimuStar helps lenders hone judgment and decision-making skills by replicating real-life experience in collecting and interpreting data, which is the only way to fully test lender's skills.

In the SimuStar Series, as in real life, players work with a team of lenders. These virtual colleagues help guide players, through meetings and conversations, as they collect information on a lending opportunity, analyze key financial data and make decisions on structuring a loan.

Players also have the chance to visit the potential clients and meet with their team, ask questions, and tour their facilities as they gather information to make their decisions.

SimuStar offers the chance to practice critical skills using actual case studies in an environment similar to players’ actual workplace. It is designed to recreate job situations realistically, where players judgment is tested, but without the risk of a real lending process.

To help populate this environment with enough variety so that each challenge presents something different, SimuStar uses a vast collection of real life case studies to provide a library of complex lending scenarios specifically designed to challenge the learner whilst delivering the widest range of useful experiences possible.

Examples of SimuStar Cases

Kings Confections
Industry: Manufacturing


King’s Confections, a manufacturer of chocolates and confections, is a prospective customer that the lender has contacted to request a meeting. The Company currently has a line of credit and various term loans which the customer may be interested in moving to the lender’s financial institution.

The lender will be required to review the historical and projected financial information for King's, meet with the management team and tour the King's plant to assess the risk in lending to the company. If the lender determines that refinancing the company’s debt is a viable transaction, they will have the opportunity to propose a loan structure for approval.

ECS
Industry: Manufacturing


ECS is a company that designs, manufactures, services and distributes electrical power condition systems for a variety of commercial and industrial applications.

There are three versions of ECS Serious Game:

1. ECS is a prospective customer looking to refinance its line of credit, currently with another bank.
2. ECS is an existing customer looking to borrow more money to restructure its balance sheet after a large inventory purchase for “pennies on the dollar” from another company. An additional element of guarantees is addressed in this version. 
3. ECS is a current customer looking to renew their line of credit. During the site and factory visit, the lender discovers that there is a covenant breach that must be addressed. 

About Omega Performance

Omega Performance equips bankers with the skills to source sound lending opportunities and structure high-quality, profitable loans to help grow a more profitable, higher-quality loan portfolio. Omega Performance combines more than three decades of experience with industry-leading technology to provide the results banks need.